What's Next for the CFO? Broader Reach, Big Picture Thinking

Jan 16, 2014

Easter Seals New Jersey CFO Cheryl Marks Young and her finance team applied technology to create a weekly trend line for its behavioral health services program several years ago. The data helped solve some curious questions. While all the previous data seemed fine, the five-week trend by location revealed that one of the nonprofit’s 60-plus locations for people with persistent mental health challenges had unused capacity. That meant less revenue for the nonprofit, and it also meant the group wasn’t serving the community as well as it wanted. Asked about what was going on, the local staff observed they simply weren’t getting enough referrals.

Comparing the occupancy and capacity rates with personnel changes in their data systems, Marks Young's team and leaders within the program who also analyzed the data saw something else that could be a factor. The location had experienced some staff turnover, and new hires might have needed stronger skills for effectively engaging people who needed services in the community.

With the continual growth of regulations, the always-accelerating speed of business activity, and the harder-to-navigate demands of their competition, CFOs are being called on more than ever to help companies make strategic decisions. In terms of professional satisfaction, that’s great news for executives who, just a few decades back, were largely viewed primarily as bean-counters. But it’s also a challenge, as they need to instantly toggle between minutiae and big-picture thinking. Those who can embrace and understand advances in modern technology are poised to help their organization plot their route toward the future.

Data Without Analysis Is Just Data
Since he started his career in the late 1980s, John C. Slusser, assistant controller at Quest Diagnostics, says he’s seen his field change from “accounting” to “finance,” and the change has tracked closely with the rise of new technology. Today, he says, being a numbers guy doesn’t just mean looking at debits and credits. It involves all sorts of operational data, and, more importantly, bringing different types of information into a single system that can dig out unexpected connections.

“You know that the computer’s going to do the math for you, so it leaves finance folks in the position to look broader,” says Slusser, who will also be speaking at ProformaTECH. “You can slice and dice more metrics and analytical data to help formulate a strategy.”

Slusser says bringing different kinds of data together allows finance to help guide operations managers. At Quest, that might mean explaining how patient volumes and population types at any given laboratory location contribute to profitability. In other companies, it could mean helping managers rearrange production lines for greater efficiency.

“I can communicate that to the manager or the press supervisor to understand the ramifications of multiple setups,” he says. “In the past, before technology allowed us to see all of this, you would sit in the back and the operations managers were trying to figure all that out.”

The CFO as ForecasterIf it’s useful for finance departments to be able to seek out efficiencies in the present, it’s certainly more helpful when they can come up with guidance about the future. Even the best software isn’t a crystal ball, but Slusser says computer modeling can let companies try out different scenarios that they think might become reality. For example, he says, a pharmaceutical firm could try to figure out what would happen if a new drug was, or wasn’t, approved for Medicare and Medicaid reimbursement, by pulling in data about previous marketing campaigns to compare different strategies.

In a similar vein, Marks Young says today’s CFOs need to be able to predict the effects of all sorts of potential events that aren’t directly financial, like bad press or a big insurance claim. “What you have to do is look at it almost like an attorney,” she says. “You look at precedents for what has happened in the past.”

Beyond just enabling the modeling of scary possible scenarios, Marks Young says, technology can also help keep them from happening. For example, soon after she joined Easter Seals New Jersey, she learned the changing regulatory landscape was creating a situation where organizations might be fined millions of dollars for what traditionally would have been considered a paperwork mistake. Since, as Marks Young says, Easter Seals New Jersey leadership is always proactive in improving the nonprofit’s quality and results, there was an effort to look at technology solutions to prevent and reduce the risk of data errors.

Marks Young — who started her career in computer science before rising through the finance ranks — understood the issues and joined the team to help build a system that ensured that every box in the relevant paperwork was filled in properly and that data was in sync with all other related records, before reports and important financial data was generated.

To both Marks Young and Slusser, one of the key elements of useful technology systems is that they gather a huge variety of data together in one spot. That helps avoid errors that might come from multiple people inputting the same data into different systems, and it also helps draw connections that might otherwise never be seen. A single query can judge how the money spent on job training for seniors relates to the satisfaction levels of a program for a nonprofit, for example, or how slight changes in staffing levels affect wait times across hundreds of testing locations at a for-profit medical company.

“When you have this large amount of data, you can use it poorly or you can use it well,” Marks Young says. “When you use it well, it should be able to inform you about those bigger decision items.”

To see the full list of speakers and topics at this year’s ProformaTECH, which will be held at the Venetian in Las Vegas on Thursday, February 13, 2014, go to our registration page.

Livia Gershon is a freelance writer in Nashua, N.H.

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